Cohousing-L Mailing List: HOA Dues Increase & Reserves

[Sharon Villines (sharon]

This is a link to the California Reserve Study Guide which is very well written 
and explains the what and why of reserve studies.

http://www.dre.ca.gov/files/pdf/re25.pdf

I have not a clue why they don’t recommend a minimum funding. I suspect because 
they think then everyone would do the minimum and no more. But if you have a 
study, at least you know how far behind you are. 

The Association Reserves website that does studies in many states has a variety 
of publications plus a DYI reserve study program. They also have a sample study 
online.

https://www.reservestudy.com/resources/

They assess the risk of having a special assessment at 51% there is no reserve 
fund. If 40% funded, 10% risk, and 80% funded, -1% risk. 70-100% funded is 
strong. 

The study establishes a base for the projected costs of replacing everything 
you own for the next 30-50 years, so this means 70-100% of the total projected 
cost. If you are not adequately funded, that will affect property values as 
well. People moving in will have to make up the deficit so the condo is worth 
less.

Association Reserves also notes that when funds go below 40%, regular 
maintenance tends to be seriously deferred, costing more later.

Sharon
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Sharon Villines
Takoma Village Cohousing, Washington DC
http://www.takomavillage.org